How is negotiation in a legal dispute different from other negotiations?

For most of us, “negotiation” commonly occurs with some type of business deal – a contract for employment, the sale of a home, the purchase of an automobile (unless you’re a parent, in which case you’re probably involved in negotiation on a daily basis). In business deals, the parties involved usually have somewhat complementary interests – one party wants to sell a house, the other party wants to buy a house – and they are negotiating the specific details of the transaction. While the process involves some aspects of competition, the parties are not necessarily adversaries. For both parties there is a benefit or value associated with the transaction at issue, and the parties can be seen more as partners.

In advance of the negotiation, the parties will determine their reservation points (what is the maximum I’m willing to pay for the item? Or, what is the minimum I’m willing to accept). This could also be called a bottom line. In order to define their reservation points, the parties also need to determine their best alternative to a negotiated agreement, or BATNA (as described by Roger Fisher and William Ury in their book Getting to Yes). In other words, if negotiations fall through and there is no agreement, what course of action will be taken? “[The BATNA] is the standard against which any proposed agreement should be measured.” Is the current proposal better or worse than the BATNA? The reservation point is the point at which you would be better off going to your BATNA. Ideally, negotiations take place in the zone somewhere in between each party’s reservation points – a range of solutions that both parties would prefer to no agreement. However, ultimately if no agreement can be reached, both parties are free to walk away. There is nothing binding them to continued negotiations, and no agreement will be imposed upon them if they fail to reach one on their own.

In legal disputes, walking away is not necessarily an option. In a case facing or engaged in litigation, both parties often have the same BATNA – court. As Gerald Williams wrote in Negotiating as a Healing Process, once parties are in conflict, there are essentially only two ways out: negotiation or adjudication. Once someone initiates a lawsuit, the opposing party is not free to walk away (unless he or she is willing to risk default judgment in favor of the initiating party). Therefore, the standard against which any proposed agreement should be measured becomes “what would a court do.” In other words, is the current proposal better or worse than what a court might do? A party who feels confident that a court will rule in his or her favor may be more demanding and less likely to compromise. But there are risks and costs associated with trial – for both parties – and parties may be willing to accept a little more or a little less to reach an agreement and avoid the cost, expense, and stress of a trial.

How can attorneys help? While no one can predict with absolute certainty what a court will decide in a case, a skilled lawyer can provide guidance about what judicial outcomes may be more or less likely, so that a client can make a more informed decision. Attorneys can also provide a more rational, less emotional, perspective to the situation. In addition to their experience and training in negotiating, attorneys can often craft creative solutions that the parties couldn’t see themselves.

Disclaimer

The information contained in this website is for general information and advertising purposes only and is not to be considered legal advice nor does it substitute for the advice of an attorney. You should not act or rely on any information contained in this website without first seeking the advice of an attorney. Transmission of the information from this website does not create an attorney-client relationship. This site contains references and links to external resources. The third party website links that are contained on this website are maintained and controlled by those third parties. Stallard & Bellof, PLLC is not responsible for the content of any third party website. Any reference to another website shall not be considered a recommendation, approval, or endorsement of that site's author or content. Please contact our office should you have any questions regarding this legal disclaimer.